Italy won't backtrack on 2019 budget, says Deputy PM Salvini

Blanche Robertson
October 11, 2018

Salvini spoke during a press conference with French far-right leader Marine Le Pen in Rome.

Italian bonds have been pummeled since the budget deficit was announced on Sept 27, with full proposals due to be handed over to the EC for review on Oct 15.

Italy's Deputy Prime Minister condemned that European Commission President Jean-Claude Juncker and Economics Commissioner Pierre Moscovici as nemesis of Europe.

Just recently, the Italian government sent European markets in a frenzy as comments from Claudio Borghi, who heads economic policy for the ruling Lega party, said the country would be better off if it wasn't tied to a single currency, the euro, and operated on its own currency.

Local stocks fell for a third day, with the FTSE-MIB Index of shares sliding as much as 2.5% to the lowest level since April 2017.

"I say to those who are thinking of speculating on the Italian economy that they are wasting time and wasting money because we will not go back", Salvini said.

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The populists have blamed Brussels for slamming Italy's proposed budget, accusing the European Commission of driving up the spread. When these finally appeared, some of the numbers contained in the delayed report were significantly different from those initially proposed by Salvini and his Five Star counterpart, Luigi di Maio. He's in Berlin Monday for talks with officials including Economy and Energy Minister Peter Altmaier.

"The EU is built on a lot of promises ... but very few achievements and results (...) quite shabby", she assured.

Some European finance ministers and EU officials I talked to beforehand suggested that they expected exactly this kind of climbdown, and said that they saw it as the natural effect of a market keen to enforce disciplinary limits on Italy's most expansionist spending plans in a generation.

According to analysts at Danske Bank, in Europe the Italian Job continues to raise risks of "blowing the bloody doors off".

Rome is due to submit its draft budget by 15 October, which will then be poured over by European Union officials to check whether it abides by their rules. The government is expected to submit a draft budgetary plan to the European Union commission by 15 October.

Addressing a parliamentary commission, Tria said fears over next year's budget plan were unjustified.

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